04-26-21 Regular Meeting of the La Porte City Council

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To the Honorable Mayor, Members of City Council and the City Manager April 5, 2021 City of La Porte, Texas Page 4 of 10 Our audit will be conducted on the basis that management and, when appropriate, those charged with governance acknowledge and understand that they have responsibility: 1. For the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; 2. For the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; 3. For identifying, in its accounts, all federal awards received and expended during the period and the federal programs under which they were received, including federal awards and funding increments received prior to December 26, 2014 (if any), and those received in accordance with the Uniform Guidance generally received after December 26, 2014; 4. For maintaining records that adequately identify the source and application of funds for federally funded activities; 5. For preparing the schedule of expenditures of federal awards (including notes and noncash assistance received) in accordance with the Uniform Guidance; 6. For the design, implementation, and maintenance of internal control over federal awards; 7. For establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards; 8. For disclosing accurately, currently, and completely the financial results of each federal award in accordance with the requirements of the award; 9. For identifying and ensuring that the City complies with federal statutes, regulations, and the terms and conditions of federal award programs and implementing systems designed to achieve compliance with applicable laws, regulations, grants, and contracts applicable to activities and its federal award programs; 10. For identifying and providing report copies of previous audits, attestation engagements, or other studies that directly relate to the objectives of the audit, including whether related recommendations have been implemented; 11. For taking prompt action when instances of noncompliance are identified; 12. For addressing the findings and recommendations of auditors, for establishing and maintaining a process to track the status of such findings and recommendations and taking corrective action on reported audit findings from prior periods and preparing a summary schedule of prior audit findings; 13. For following up and taking corrective action on current year audit findings and preparing a corrective action plan for such findings; 14. For submitting the reporting package and data collection form to the appropriate parties; 15. For making the auditor aware of any significant contractor relationships where the contractor is responsible for program compliance; 16. To provide us with: a. Access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements, and relevant to federal award programs, such as records, documentation, and other matters; b. Additional information that we may request from management for the purpose of the audit; and c. Unrestricted access to persons within the City from whom we determine it necessary to obtain audit evidence. 17. For adjusting the financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the current year period(s) under audit are immaterial, both individually and in the aggregate, to the financial statements as a whole; 18. For acceptance of nonattest services, including identifying the proper party to oversee nonattest work; 19. For maintaining adequate records, selecting and applying accounting principles, and safeguarding assets;